Analyzing Starwood Property Trust (STWD) and The Competition
Starwood Property Trust (NYSE: STWD) is one of 38 public companies in the “Mortgage REITs” industry, but how does it contrast to its peers? We will compare Starwood Property Trust to similar businesses based on the strength of its dividends, institutional ownership, analyst recommendations, valuation, earnings, risk and profitability.
This is a summary of current ratings for Starwood Property Trust and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Property Trust||0||1||2||0||2.67|
|Starwood Property Trust Competitors||199||1038||917||41||2.36|
Starwood Property Trust currently has a consensus price target of $24.50, indicating a potential upside of 11.57%. As a group, “Mortgage REITs” companies have a potential upside of 1.70%. Given Starwood Property Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Starwood Property Trust is more favorable than its peers.
Earnings and Valuation
This table compares Starwood Property Trust and its peers top-line revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Starwood Property Trust||$546.16 million||N/A||12.48|
|Starwood Property Trust Competitors||$626.30 million||$243.53 million||1.66|
Starwood Property Trust’s peers have higher revenue and earnings than Starwood Property Trust. Starwood Property Trust is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.
Institutional & Insider Ownership
68.6% of Starwood Property Trust shares are owned by institutional investors. Comparatively, 58.0% of shares of all “Mortgage REITs” companies are owned by institutional investors. 2.4% of Starwood Property Trust shares are owned by company insiders. Comparatively, 3.3% of shares of all “Mortgage REITs” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Volatility & Risk
Starwood Property Trust has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, Starwood Property Trust’s peers have a beta of 0.72, suggesting that their average share price is 28% less volatile than the S&P 500.
This table compares Starwood Property Trust and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Starwood Property Trust||55.89%||11.39%||0.69%|
|Starwood Property Trust Competitors||49.20%||10.70%||2.78%|
Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 8.7%. Starwood Property Trust pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Mortgage REITs” companies pay a dividend yield of 10.0% and pay out 80.6% of their earnings in the form of a dividend. Starwood Property Trust lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.
About Starwood Property Trust
Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes a servicing business in the United States that manages and works out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.
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